If not, what else would be needed to steal all funds from all people and completely break bitcoin?

I bet some will say ECSDA gives bitcoin an additional layer of protection. I counter this by saying ECSDA is dependent on a hash function such as SHA256. So I will ask this as well: What kind of ECSDA does bitcoin use and would it still be protected if SHA256 were broken?

Yes, I know I am illustrating an unlikely scenario but I still believe we should know what will happen.

If you want to mention other hash functions in relation to SHA256, you can. Feel free to explain how RIPEMD-160 would keep bitcoin safe in case of a SHA256 exploit.

Could you elaborate on what would be necessary to "switch to a different address type" insofar as what users with bitcoins on the old address type would have to do to move over. Would everyone just have to create new addresses and move all their bitcoins?
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B TNov 15 '14 at 20:55

@BT Yes. The addresses would be much longer, though.
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Nick ODell♦Nov 15 '14 at 20:56

Nick's answer is very helpful, but might not be sufficient to get us (and BitCoin) in the clear. There may be a valid and grave concern based on the fact that crypto hashing functions aren't proven to satisfy constraints 2 and 3, so they potentially can be weak.

Even though people could switch away from a crypto hashing function to a better one, what would allow us to know for sure that someone isn't silently using the weakness of the hashing function to steal? Going undetected would allow you to leech from the bitcoin system, perhaps by getting a enormous share of mining rewards without expending nearly as much computing power. This kind of arbitrage could allow you to get rich off of every nerd who uses BitCoin (admittedly myself included) and some venture capitalists (I'm getting there ;) ). And since we're speculating, wouldn't it be convenient to tie develop a currency based on crypto if you want to get really rich. Obviously, exploiting it without removing its potential for growth and adoption...

If you know the exploit to SHA-256 and know how to leech off BTC and other crypto currencies, the altruistic and honorable thing to do is publish the exploit. The egocentric thing to do would be to abuse it.

I hope that someone will prove me wrong about this potential for abuse.

If not, it basically comes down to this: with great power comes great responsibility! Everybody says trust isn't needed with BitCoin. It STILL comes down to trust, but now trust that no one came up with this loophole or that the one who did isn't breaking the system more than it's contributing societal value.

I'd really have big respect for the person for choosing honor above personal gain. Unless you siphon the gains to a good cause, but even then I'm sure that a single person isn't best capable of handling those amounts of value. A crowd or even a market knows better how to allocate funds somewhat optimally.

If you knew an exploit to a major crypo algorithms like SHA256, you could sniff people's passwords through SSL, crack their back accounts and drain them of fiat in a swift weekend. I think bitcoin would be the least of the worlds concerns.
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Erik AronestyDec 23 '13 at 17:45